Malaga Financial Corporation Reports Increased Earnings for the First Six Months of 2023

PALOS VERDES ESTATES, Calif., July 14, 2023 (GLOBE NEWSWIRE) -- Malaga Financial Corporation “Company” (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the six months ended June 30, 2023 was $11,469,000 ($1.34 basic and fully diluted earnings per share) compared to $9,774,000 ($1.14 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 14, 2022) for the same period ended June 30, 2022, an increase of $1,695,000 or 17%. Net income for the quarter ended June 30, 2023 was $5,594,000 ($0.65 basic and fully diluted earnings per share), an increase of $615,000 or 12% from net income of $4,979,000 ($0.58 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 14, 2022) for the quarter ended June 30, 2022, and a decrease of $281,000 or 5% from net income of $5,875,000 ($0.69 basic and fully diluted earnings per share) for the quarter ended March 31, 2023. For the first six months of 2023, the Company’s annualized return on average equity was 12.29% and the annualized return on average assets was 1.53%.

The increase in earnings of $615,000 for the second quarter of 2023 compared to second quarter of 2022 was primarily attributable to a $1,041,000 increase in net interest income after provision for loan losses and a $27,000 increase in other operating income, offset by a $240,000 increase in income tax expense and a $213,000 increase in other operating expense.

Net interest income totaled $11,205,000 in the second quarter of 2023, an increase of $1,085,000 or 11% from the same period in 2022. This resulted primarily due to an increase in excess interest-bearing assets over interest-bearing liabilities of $16.4 million and an increase in the interest rate spread from 2.70% to 2.87%. The increase in the interest rate spread is primarily attributable to an increase of 1.07% in yield on average interest-earning assets offset by an increase of 0.90% in yield on average interest-bearing liabilities.

Operating expenses increased 6% in the second quarter of 2023 to $3,529,000 from $3,316,000 in the second quarter of 2022. The increase is primarily attributed to increases in deposit insurance premium of $129,000, compensation of $70,000, and data processing of $14,000.

The Company had no 30-day delinquent loans or loans with deferred payments and no foreclosed real estate owned at June 30, 2023. The Company’s allowance for credit losses was $3,987,000, or 0.31% of total loans, at June 30, 2023.